Stitt warns legislators to be cautious about state's base spending

State lawmakers will have $85.5 million less to spend next year largely due to low oil and natural gas prices and global economic uncertainties as a result of the COVID-19 coronavirus outbreak in China.

In the fiscal year that begins July 1, 2020, lawmakers will be able to appropriate roughly $8.2 billion, or 1% less than the $8.3 billion budgeted for the current fiscal year, according to budget projections certified Tuesday by the Board of Equalization.

Gov. Kevin Stitt, who chairs the board, warned lawmakers to think a year ahead when budgeting for fiscal year 2021 because projections for fiscal year 2022 show lawmakers may have only $7.9 billion to spend that year in a best-case scenario.

Stitt said it would be a “fool’s errand” to appropriate $8.2 billion for recurring costs next year when the state will have less money to spend in fiscal year 2022.

“I’m nervous about spending and increasing the base-level expenses over these numbers right here,” Stitt said, pointing to highlighted budget numbers. “Even though we have $8.2 (billion) to spend, we have to be very, very careful.”

Key to next year’s budget is $310 million in one-time cash carried over from fiscal year 2019 because Oklahoma’s constitution stipulates appropriations cannot exceed 95% of projected revenues. Stitt is proposing saving some of that money or using it for one-time expenses so as not to exceed $7.9 billion in recurring expenses next year.

Budget projections from December indicated next year’s budget would be relatively flat. The budget projections unveiled Tuesday included decreased estimates on gross production tax collections on oil and natural gas and corporate income and sales taxes for next year.

Some of the economic factors leading to the decreased budget projections are out of the state's control. The spread of the coronavirus has economic experts predicting a Chinese economic slowdown that could have ripple effects across the world, said Shelly Paulk, deputy budget director for the Office of Management and Enterprise Services.

But Oklahoma also is facing unique budget challenges due to low oil and natural gas prices.

Carmen Forman covers the state Capitol and governor's office for The Oklahoman. A Norman native and graduate of the University of Oklahoma, she previously covered state politics in Virginia and Arizona before returning to Oklahoma.
Read more ›